Tuesday, September 07, 2010
8:30:16 PM EDT

Long Candidate

by
Scott Hawes

Company Description:
Power-One, Inc. (Power-One) is a designer and manufacturer of energy-efficient power conversion and power management solutions for renewable/alternative energy, routers, data storage, servers and data centers, wireless communications, optical networking, semiconductor test equipment, industrial markets and custom applications. Its products convert, process and manage electrical energy, in both alternating current (AC) and direct current (DC) form. In the renewable energy market, it sells a range of products of high-efficiency inverters. The Company designs, sells and services its products globally and has resources in Europe, North America and the Asia-Pacific region.

Why We Like It:
Take a look at the grey volume bars on the chart below. It is clear PWER is being accumulated with institutional money as the price has risen over the past 18 months. I like PWER's business and believe this stock will continue to get bought if the market cooperates. I suggest readers use a trigger of $10.55 to enter long positions and target a move back towards the stock's recent high. This is above the stock's upward trend line and the 50-day SMA. Our initial stop will be below both of these at $9.68.

Suggested Position: Long PWER stock if it trades to $10.55

Options Traders: Buy October $11 CALL, current ask $0.95

Annotated daily chart:

Entry on September XX
Earnings 10/21/10 (unconfirmed)
Average Daily Volume: 5.3 million
Listed on September 7, 2010